US Lawmakers backing Cryptocurrency! Despite the US government’s highest officials taking an opposing stance to cryptocurrency, there is a growing faction of US lawmakers backing cryptocurrency.
This was evident in the most recent House Committee on Financial Services’ bearing on Libra, Facebook’s proposed digital currency. In the hearing, it was clear that a number of US lawmakers backing cryptocurrency will come in the form of developing a permissive regulatory machination to prevent growth and innovation in the crypto sector.
About a week before the hearing, the Blockchain Promotion Act was passed, signaling the government’s intention to develop a safety-minded and cautious legislative framework to oversee the possible implementation of blockchain technology in various public sectors.
This progress made in the regulatory body of the United States Government, not just the words of high placed officials like the President, whose job is to enforce the laws set forth by Congress, shows that cryptocurrency and blockchain is being slowly embraced by the US government – from a regulatory point of view.
North Carolina’s 10th congressional Representative, Patrick McHenry, and a ranking member of the US House Committee on Financial Services, described Bitcoin as an “unstoppable force” while delivering a testimony during the most recent hearing.
McHenry implored regulators to encourage innovation within the United States’ digital currency sector, stating:
“The world that Satoshi Nakamoto — author of the Bitcoin white paper — envisioned, and others are building, is an unstoppable force. We should not attempt to deter this innovation, and governments cannot stop this innovation, and those who have tried have already failed. So the question then becomes, what are American policymakers going to do to meet the challenges and the opportunities of this new world of innovation?”
McHenry said that the desire to create a highly tightened regulatory plan to restrict cryptocurrency stems from policy makers who wish to punish and suppress innovation, going as far as saying: “Some politicians want us to live in a permission-based society, where you need to come to government, ask for its blessing before you can begin to even think about innovating.”
On the same day, McHenry was interviewed on CNBC’s “Squawk Box” to discuss the hearing on Facebook’s proposed digital currency at Capitol Hill, in which he described a “knee-jerk reaction to kill it [Libra] before it grows” that many U.S. lawmakers might have. He argued:
“There’s a white paper that’s an idea. And there’s a consortium of companies — some with better reputations than Facebook currently has — that are developing a digital payments platform and a digital currency. Interesting, right? Instead, we have a knee-jerk reaction to kill an idea.”
McHenry emphasizes the need and duty of policy makers to encourage and foster innovation given the context of the US economies stagnant growth. He went so far as saying to cryptocurrencies and blockchain ability to comply with existing laws – if they’re able to do it, “have at it.”
McHenry is thinking long term. And holistically. He aptly mentioned those who have been abandoned by financial institutions – those who live on the fringes of what financial institutions are able and or willing to service. It is important to include those people when discussing regulations of digital currency. More pointedly – those who aren’t able to transfer money without exorbitant fees.
“So, you have an immigrant who, on Friday evenings, judiciously, every week, sends money back to his family where he grew up, wherever in the world. He’s paying Western Union 7% to 10% to move that money. Libra is a very different mover in that space to reduce the cost of those low-dollar remittances.”
McHenry is also in favor of an advanced distributed ledger technology as a potential solution for the large transfer of money that happens every day globally. He said:
“It’s exceedingly costly, and the SWIFT network that is being broadly used is a very expensive one, and an old technology.” So, there is huge opportunity for financial inclusion for low-dollar and extreme cost-savings potentially for high-dollar movements of cash.”
On July 9th, the other piece of this puzzle was approved. The Senate Commerce, Science, and Transportation Committee approved the Blockchain Promotion Act. The bill was first introduced to the House of Representatives in October 2018 and was sent to the Senate in February of this year. It directs the Department of Commerce to firmly establish a definition for “blockchain”.
The Bill is intended to prevent a patchwork and shoddy regulatory definition of the word “blockchain” by potentially 50 separate states and instead establish a framework for future legislation at the Federal level. This bill has received rare bipartisan support in both the Senate and the House.
In the Senate, the Blockchain Promotion Act is co-sponsored by Democratic Senator Ed Markey of Massachusetts and Republican Senator Todd Young of Indiana. Markey describes blockchain as “an exciting new technology with great potential and promise,” adding:
“At its core, blockchain is a tool for exchanging data in a secure and accountable fashion, and it has already been deployed to expand access to renewable energy, enhance health care delivery systems, and improve supply chain efficiency. This legislation will help further understand applications for this technology and explore opportunities for its use within the federal government. This is a commonsense step that will help position the United States and for success.”
Republican Senator Todd Young emphasizes blockchain’s revolutionary potential to be the spark needed to safely and responsibly sustain economic growth across all industries. He said:
“If America leads in its development, we can ensure that it’s benefits will be shared far and wide. Blockchain has the potential to not only provide financial and economic benefits at home, but humanitarian and social support in developing countries will benefit from American leadership.”
Within 90 days of the enactment of the Blockchain Promotion Act, Wilbur Ross, the US Secretary of Commerce, will be required, by law, to establish a working group within the Department of Commerce.
The group, called the Blockchain Working Group, will consist of various members representing many federal agencies that could benefit from adopting a distributed ledger technology as well as representatives from academia, industry, non profit organizations, and consumer advocacy groups that are engaged in activities relating to blockchain technology.
The group is required to have representatives outside the technology sector – with representation from both rural and urban stakeholders. They’ll be tasked with submitting a report to Congress within one year of the Blockchain Promotion Act’s passage.
What do you think? We know President Trump doesn’t like blockchain or Bitcoin, but there is growing evidence that the body responsible for laws in this country, Congress, both the lower and upper house (House of Representatives and Senate respectively) are amenable to blockchain and cryptocurrency. Let us know what you think on our Facebook Page!
